The country plans to double its strategic oil
reserves to two million tons over two years from the current one million
tons.
Sources told that oil companies were directed last month and again
around a fortnight ago to raise their reserves to 1.5 million tons,
equivalent to 21 days of consumption, to face the eventualities
arising out of a possible United States attack on Iraq.

The Water and Power Development Authority and the
Karachi Electricity Supply Company were asked to increase their storage
to 60-day consumption so that electricity rates did not go up
unnecessarily in case of oil price increase, the source said. The US
attack could impact the country in terms of supply and price hike.

The oil companies are boosting their reserves but
Wapda is far behind the target. Its storage is hovering around 12-15
days consumption, they said.

The country has historically been maintaining 15 days
of strategic reserves or one million tons but was warned last year by
the relevant quarters that it should be raised up to 45 days requirement
or there million tons before the privatisation of Pakistan State Oil. It
was, however, agreed that reserves should be raised in phases.

The oil companies are awaiting the government's
approval to a plan they want to implement to increase the reserves.

The infrastructure development for the increase could
cost up to Rs4 billion. One of the important suggestions of the plan is
reduction in number of oil storage depots to 10 from 29. This will mean
an increase in prices of petroleum products in far-flung areas.

The government has deregulated the oil pricing
mechanism, which entails fixation of the rates by the marketing
companies for the 29 central depots. As a result, prices at outlet level
now vary by 10 to 40 paisa per litre in different areas on the basis of
transportation cost.

The country's current oil refining capacity is around
12 million tons while another 6.5 million tons are imported, that
annually cost $3-3.5 billion.

GAS PIPELINE TO BENEFIT REGION, SAYS KHATAMI

Iranian President Seyed Mohammad Khatami has
underscored the importance of enhancing regional economic and trade
cooperation, saying that the proposed multi-billion dollar "project
of laying a gas pipeline from Iran to India via Pakistan will bring
peace and friendship in the region."

Addressing a function organized by the Federation of
Pakistan Chambers of Commerce & Industry, the president said:
"Iran considers the (gas pipeline) project a major project on the
national level and regards it as a symbol of strategic economic ties
with Pakistan. The implementation of the project will benefit all the
people of the region."

SICK UNITS SURVEY UNDER WAY

The ministry of industries is conducting surveys to
work out the viability of the 'unintentionally' sick industrial units in
the public and private sectors to revive and generate economic activity
in the country.

This was stated by Federal Minister for Industries
Liaqat Jatoi while speaking at a meeting with the members of the Lahore
Chamber of Commerce and Industry. He said that only those sick
industrial units, which would have the capacity to run and give profit,
would be revived.

FRUIT STORAGE FACILITY

The Export Promotion Bureau, NWFP, will establish a
fruit storage, processing/treatment and packaging facility in the
Frontier province to increase export of fruits from the Frontier
province.

According to an EPB press release issued, Small and
Medium Enterprise Development Authority (Smeda), NWFP, had been assigned
the task to prepare a feasibility study.

An agreement on conducting feasibility study has also
been signed between EPB and Smeda.

"The establishment of the facility would provide
specialized services in the field of grading, treatment, processing,
storage and packaging practices," contained the press release.

JAPAN OFFERS HELP FOR TORKHAM HIGHWAY

Japan has offered to assist Pakistan and Afghanistan
in the construction of Torkham-to-Kabul dual carriageway to facilitate
trade and reconstruction of the war-battered country

An official source told that the Japanese Bank for
International Cooperation (JBIC) has indicated to finance the road from
Torkham to Kabul through Jalalabad and has asked Pakistan to provide
project details and cost estimates as soon as possible.

The state-run National Highway Authority (NHA) is
separately planning to repair the highway between Peshawar and Torkham,
which is currently in a very dilapidated condition.

STRATEGIC ASSETS ON PRIVATIZATION AGENDA

Privatization is a complicated and very complex
business. It requires a well thought-out strategy, that sets priorities
and schedule for sale of state assets in fast changing investment
environment.

The sell-off process becomes more intricate,
difficult as well as sensitive when strategic assets are put on the
privatization agenda. Its handling requires more sophisticated skills.
It is not a simple retail sale. It is a sale of a strategic asset to a
strategic investor.

EXPANSION OF PS CAPACITY ON CARDS

The government has decided to expand the capacity of
Pakistan Steel which is not sufficient to meet the growing demand of
steel products.

Official announcement issued, said the expansion
would be executed in phases with each phase to be commercially and
financially viable based on current lower rate of tariff protection.

It has been planned to increase the production of
value added products first and then enhance the iron making capacity
through backward integration. According to the announcement, the planned
expansion would be financed from Pakistan Steel's own resources without
any burden on the national exchequer.